TMI Blog2021 (3) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... all other factors show that there is no establishment of a separate undertaking. The decisions referred by learned CIT(A) are not at all applicable on the facts of the present case. Here it is a clear finding that this is the last year of eligibility of claim u/s. 80IB(4) deduction of the eligible unit and the assessee has tried to pass off an increase in production capacity as establishment of new unit. The Assessing Officer has duly found that there is no establishment of a new unit. Only an increase in production is being passed off as establishment of new unit. Not a single ingredient for establishment of new unit has been noted by the Assessing Officer or ADIT on his physical visit to the unit. In this regard we note that a Constitution bench of the honourable Supreme Court in the case of Commissioner of Customs (Import) Vs M/s. Dilip Kumar Company [ 2018 (7) TMI 1826 - SUPREME COURT] has expounded that in case of exemption provisions if two views are possible the one in favour of the Revenue has to be adopted. Moreover we find that learned CIT(A) has not adjudicated the alternative plea of the assessee. Assessee is aggrieved by this. Assessee has also filed cross objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing deduction u/s.80IB(4) without appreciating the fact that the provisions of section 80IB restricts the deduction for new unit or industrial undertaking in contrast to the provisions of section 80IC, which allowed deduction on expansion of the existing industrial undertaking/unit? 5. Whether on the facts and in the circumstances of the case, the Learned CIT(A) was justified in ignoring the ratio laid down by the Hon'ble Supreme Court on independent unit or separate undertaking in the case of Textile Machinery Corporation Ltd. v/s Commissioner of Income Tax, West Bengal [1977] 107 ITR 195 (SC)? 6. The appellant prays that the order of the CIT(A) on the grounds above, may be set aside and that of the Assessing Officer be restored. 3. Brief facts of the case the assessee is engaged in the business of manufacture of Aluminium Composite Panels (hereinafter referred as 'ACP'). It has claimed to have two manufacturing units in Jammu. It had claimed deduction under section 80IB(4) of Income Tax Act, 1961 (hereinafter referred to as the 'Act') in respect of both [he units. While deduction claimed for Unit-l was 13,80,69,708/-; that for Unit-II was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise registration number, P.P. registration number etc. Further to substantiate his findings, ADIT (Inv.),Jammu has recorded the statement of Shri Sandeep Uppal, Works Manager who in his statement given on oath u/s 131 of the IT Act in wherein he has confessed that only one unit is running from assessee's factory premises at Jammu. In the statement record on oath, the Works Manager of the assessee at Jammu factory categorically agreed that assessee-is not running two units from the said premises. 5. Upon show notice in this regard the assessee basically emphasised upon the increase in production and submitted that the second unit was not established in violation of the rules prescribed. However the assessing officer was not satisfied. He held that only addition of machinery cannot be called establishment of an additional industrial undertaking. In this regard he referred to the meaning of industrial undertaking from the decision of the Honourable Kerela High Court in the case P. Alikunju Miscellaneous Application Nazeer Cashew Industries Vs. CIT, 166 ITR 804. 6. Thereafter the AO held as under :- From the submissions made by the assessee regarding Unit-I and Unit-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned. .Assessee-during the course of assessment proceedings have submitted summary of deduction u/s. 80IB Claimed by Unit-I and Unit-II over the years which are reproduced as under:- Eurobond Industries P. Ltd. Summary of 80IB claimed from 1.4.2005 to 31.3.2011 Year Unit-I Unit-II Total 2005-06 2006-07 95,920,081 95,920,082 2007-08 171,870,276 171,870,277 2008-09 138,069,708 32,242,287 170,311,996 2009-10 81,272,929 41,964,159 123,237,089 2010-11 9,268,117 68,418,723 77,686,840 7.2 The analysis of the above year-wise claim of deduction u/s.80IB for Unit-I and Unit-lI brings out the actual intent behind unjustifidely claiming 80IB of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both totalling over ₹ 4.89 crores. On 20th October 2008, the Power Development Department of Government of Jammu and Kashmir had accorded sanction for an additional 620 KW over and above 600.4 KW already sanctioned (for Unit-l), thus leading to a total load factor or 1220.4 KW. Coming to the statistics of production, while Unit-I had produced 6,09,671 square metres of ACP during FY 2008-09, after commencing production mid-year Unit-II had produced 4,41,128 square metres of ACP during the same financial year. The installed capacity on the other hand was 7,95,000 square metres and 10,95,000 square-metres of ACP for Unit-I and Unit-II respectively. While disregarding this wealth of data and documentation the AO appears to have concentrated on the apparent outward'structure of both the units being that of a single unit. 12. Learned CIT(A) thereafter referred to the decision of ITAT Mumbai in the case JCIT Vs. Associated Capsules (P) Ltd. (114 ITD 189). He referred that Hon'ble Tribunal had held that organizational features such as the legal status of the unit, the /common/control and management, the location in the same premises, the common procurement of raw materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond unit. In this regard assessing officer also obtained report from the additional director investigation. The said report duly provided that there was only one unit which was also corroborated by the examination of ADI from the assessee s work s manager. 17. From the assessee s submissions the assessing officer noted that :- 1) it does , not have its own identity in the form of PAN and various registrations, 2) does not have its own employees and management as evident from form No. 16(1) issued to its employees. 3) No separate books of accounts etc, as confirmed by its Works Manager in his statement recorded under oath. 4) Does not have own supply of raw material 5) Does not have Stock Register In these circumstances the assessing officer found the assessee's claim to be a colourable device and rejected the same. 17. On the other hand learned CIT(A) did not rebut any of the actual findings of the assessing officer and the ADIT investigation. He only referred to the increase in capacity and the increase in electric power and allowed the assessee's claim. 18. In this regard we note that the order of learned CIT(A) is very laconic. It does not addr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that in case deduction u/s. 80IB is not allowed on the new unit in that case also deduction u/s. 801B is available as the existing unit of the Appellant is eligible for deduction u/s. 80IB. 23. Since we have already remanded the matter to the file of learned CIT(A) in Revenue s appeal above and directed him to consider all the grounds raised by the assessee afresh, this cross objection has becomes statistical. Hence the cross objection is allowed for statistical purposes. Assessee's appeal ITA No. 4071/Mum/2016 for assessment year 2010-11 :- 24. For A.Y. 2010-11, the learned CIT(A) has rejected the assessee's claim for deduction under section 80IB for the same unit as above. Assessee is aggrieved by that. Revenue s appeal in ITA No. 1471/Mum/2016 for A.Y. 2012-13:- 25. For assessment year 2012-13 the learned CIT(A) has allowed the assessee's claim of deduction for the same unit by following the order of learned CIT(A) for assessment year 2009-10. Against this Revenue has filed appeal. 26. Since on identical facts we have remanded the matter to the file of learned CIT(A) in revenue s appeal for assessment year 2009-10 above, these orders of learn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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